U.S. Economy

Problems with the U.S. Economy

1. Uneven distribution of wealth

2. Overproduction by business & agriculture

3. Americans were buying less

Stock Market Crash of 1929• From 1921 to 1929 the stock

market rose from 60 to 400• Created new millionaires• Investing in the market

seemed like the sure thing• Middle income people

invested into the market• Bought stocks on margin• Paid small amount while a

loan was made by the broker

Stock Market Crash• U.S. Federal Reserves began to

raise interest rates in hope of slowing down the economy

• October 24th, people begin to panic and sell off stock

• Stock boom was over inflated• October 28th, the market

crashes when Dow goes from 400-145 points

• $5 billion erased from NYSE

Great Depression

• People began to flood the banks trying to get their savings

• Problem, banks invested customers money into the stock market

• Almost no money for people to pull out of a bank

• The Great Depression• 1/3 Americans in poverty

Great Depression

• Unemployment rates began to climb while production, production prices and wages declined

• Stock Market crash did not cause the depression but it did quicken the collapse of the economy

• American bankers demanded payment on overseas loans• Germany & Austria hit hard, Banks begin to close in Europe• U.S. goods dropped in Europe and the U.S. placed high

tariffs on imported goods• Goods all over the world depending on the U.S. would drop

Great Britain • Britain elects a multiparty

coalition known as the National Government

• Increased Taxes• Passed high tariffs• Regulated Currency• Lowered Interest Rates to

push economic growth• By 1937, unemployment

was cut in half

France Economic Conditions• France had a more self sufficient

economy (agricultural)• Over 1 million unemployed in 1935• Created political instability• In 1933, 5 coalition governments

formed and fell• Antidemocratic party begins to form• The Popular Front (moderates,

Socialists and Communists)• Popular Front failed, France

preserves democratic government

Socialists Governments Find Solutions

• Sweden, Denmark & Norway found a way to get through the depression

• Built recovery system on cooperative community action

• Sweden, government sponsored public work projects

• Scandinavian countries raised pensions for the elderly to increase unemployment insurance, housing and other welfare benefits

Recovery in the U.S.

• U.S. elects Franklin D. Roosevelt as president

• New Deal (large public works project that help to provide jobs to the unemployed)

• Money spent on welfare and relief programs

• New regulations on the stock market and banks

LaGuardia Airport (NY City)

Lincoln Tunnel (Boston)

Overseas Highway (Florida)

Smokey Mountains National Park

Hoover Dam